CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
The pricing of health care is influenced by the
accessibility, availability and utilization level of health care
infrastructure; this will determine whether the health care price will be
highly charged, moderately charged or lowly charged. It is imperative to note
that health care infrastructure is understood in both qualitative and
quantitative terms to mean the quality of care and accessibility to health care
delivery within a country (Ichok and Leibbrandt, 2003). It is judged by the
quality of physical, technological and human resources available at a given
period. The pricing of these resources will determine the actual cost to be
paid by an individual who needs health care attention. Physical structure
entails the buildings and other fixed structures such as pipe borne water, good
access roads, electricity and so on within the healthcare environments, whilst
the technology is about the equipments meant specifically for hospital use
including surgeries (Erinosho, 2006). This also includes computer equipments
and consumables while human resource comprises the health professionals
including doctors, pharmacists, nurses, midwives, laboratory technologists,
administrators, accountants and other sundry workers. All these put together
form the structure upon which the healthcare delivery is anchored in any
society and the determinants of its infrastructure.
Health
care infrastructure is a part of a larger concept of the health system which
contains the health policy, budgetary allocation, implementation and monitoring
(Oladeji, 2006). This is larger in concept and more robust than a mix of
facilities, medical consultation in terms of diagnosis, treatment and
compliance. It also involves the healthcare consumers and other factors
associated with or adjunct to health-care delivery. The differences and
fluctuation in the prices of health care infrastructural affects the price
discrimination in the pricing of health care delivery services in Nigeria. To
prevent monopolistic and exploitative tendency of health care service provider
governments, through ministries of health and other related ministries and
agencies play an important role in health pricing and development by
strengthening health systems and generation of human, financial and other
resources. This allows health systems to achieve their goals of improving
health, reducing health inequalities, securing equity in health care financing
and responding to population needs.
Improved
health outcomes are not attributable to health systems alone, as evidence has
shown, but to social, economic, cultural and environmental determinants also,
as reflected in the WHO conceptual framework of Health for All. The role of
governments in health development is well documented worldwide and is
illustrated by the impressive growth of health systems, initiated and supported
by governments and pursued through partnership with the private sector,
nongovernmental organizations and charitable institutions. Governments, which
levy taxes and benefit from natural resources, have social obligations to
provide security and to facilitate socioeconomic development, including
education and health development. The dramatic changes and challenges which
took place during the last four decades of the 20th century have greatly
affected, and led to a repositioning of, the role of governments in health as
well as other social sectors. Moves towards democracy, decentralization and a
more active role for civil society in governance, and the growing importance of
the private sector in socioeconomic development, have been accompanied by
policy changes reflecting more privatization, a more restricted role of
government in policy development, strategic planning and management, and
greater reliance on market forces.
This study therefore becomes interesting because it captures
an empirical investigation into the gaps which previous research work has
created. There are very few literatures on the pricing of health care service
delivery in Nigeria and most available works focused solely on government
health spending and Nigerian economic growth. Hence, the primary focus of this
study is to examine the pricing of health care delivery services in Nigeria
using the health care service providers in Ijebu-Ode local government areas.
1.2 Statement of the Problem
Since the cost of quality healthcare is very high in Nigeria
and with an increasing deteriorating living standard where 50% of the entire
population in Nigeria could be said to have no access to quality healthcare,
simply because they cannot afford such services even if they should demand for
them (Ichoatku et al, 2003). The
poverty scenario in Nigeria can also be linked to the absence of adequate
health facilities, which can be reduced, if not totally eradicated, by health
interventions (UNDP, 2004). Less than 1% of GDP was allocated to health care
provision in Nigeria; about 2% of government and oil revenue was allocated to
health sector in Nigeria between 1981 and 2012(CBN, 2012). Ogunbekun et al
(1999) noted that low financial commitment will result in inequality in access
to health care resources.
Therefore, since majority of Nigerians are poor and pay for their health
care out of their pocket (NQAI, 1994), many may be left out of health care
provision. Nigeria Project Agenda (2007) has demonstrated that the
accessibility to health care facilities in Nigeria is low; it was revealed that
only 3 out of 5 Nigerians have access to health care facilities. The
aforementioned problems are the motivational problems that this study is
interested to examine and efforts would be made to investigate the economic
factors that affect pricing of health care service delivery in Nigeria.
1.3 Objectives of the Study
The
broad objective of this study is to examine pricing of health care services in
Nigeria. The specific objectives are:
i.
To
examine the perception of health care service providers in Ijebu-Ode on the
factors influencing the price of their health care services.
ii.
To
examine the problems and difficulties in obtaining medical care services in
Ijebu-ode health centers.
1.4 Research Questions
The following research questions are
examined:
1. What are the factors affecting the
price of health services in Nigeria?
2. What are the problems of obtaining
medical treatment in Ijebu-ode local government?
3. To what extent will the growth of the
economy be determined by the health services?
4. Is there significant different
between the health care service delivery offered by the orthodox hospitals and
the one offered by the traditional hospitals?
1.5 Research Hypothesis
The followings are the hypothesis
used in this research work:
H0: represents Null
Hypothesis
H1: represents the Alternative Hypothesis
Hypothesis one
H0: The price of health
care has no significant effect on the demand for health care services.
H1: The price of health
care has significant effect on the demand for health care services
Hypothesis Two
H0:
Income has no significant effect in determining the demand for health care
services.
H1:
Income has significant effect in determining the demand for health care
services.
1.6 Justification of the Study
The justification of the research lies in the fact that
healthcare demand by individuals and households is influenced both by their
perceived state of health-the frequency of illness (morbidity) and by economic
factor such as income and prices. Economic theory has it that whatever is
purchased depends on income available and the relative prices of commodities.
When income is low and prices are high, quantity demanded of any commodity will
certainly be low. Healthcare demand is not exempted from this theory. This is
why individuals’ income and prices of health services must be taken into
serious consideration when drawing up policies that will aim at encouraging
high demand for health goods and services and government expenditure to the
health sector. This is because the
spending of the government on the economy as a positive or negative effect on
the country and life expectancy of the citizens. Reinhart (1999) provided an
interesting study of the effects of life expectancy and government spending on
economic growth. Reinhart’s analysis leads to the result that longer lives are
associated with faster economic growth whereas higher government spending
lowers growth for any life expectancy. This latter shows an alternative
discussion which captures the non-monotonic relationship between government
size and growth, according to Barro (1990), and furthermore, the non-monotonic
relationship between life expectancy and economic growth, in line with the
recent empirical evidence (e.g Kelley and Schmidt, 1995 and Bhargava et al.,
2001). We consider government spending to be productive and, in particular, we
focus on the role of public expenditure devoted to health. More so, pricing of
public health services can enhance life expectancy levels (Lichtenberg, 2004),
which can establish a positive linkage between government spending and economic
growth by affecting agents’ willingness to save.
1.7 Significance of the Study
The purpose
of the project is not only to evaluate and examine the pricing of health care
delivery services in Nigeria, but also to find what gaps there may be in the
literature so that further study can be focused on fully these gaps.
While
discussing the Delivery of health care service in Nigeria, it is very important
to understand its entire basic Health structure. The outcome of this study will be useful to academic,
educators, governmental and non – governmental organization, civil societies
and the general public.
It will shed more light
on the effect of pricing of health care delivery services on patient, its
implication on the survival of health care delivery, the need to curb inadequate
health facilities and supplies among other things. The study will also fuel
further research into the study, and act as consulting materials to other
researcher.
1.8 Scope of the Study
The scope
of this study been its searchlights on the pricing of health care delivery
services in Nigeria, the study will focus on health care centers in Ijebu Ode
Local Government Area of Ogun State. The major factors that are responsible for
pricing of health care delivery during this period shall be discussed in
detail.
1.9 Limitation of the Study
Limitation
here refers to the constraints that may hamper an extensive and thorough
research into the topic of the study in order to submit or present if not
perfect, but a reliable analysis constraints like time, finance, accessibility
to information and indeed the accuracy of the presented data and information to
and the analyst.
1.10 Operational Definition of Terms
Pricing: Is
process of determining what an organization will receive in exchange for their
product.
Health Care: Is
the diagnosis treatment and prevention of diseases, illness, injury and other
physical and mental impairment in human.
Service: Is an
intangible commodity, this services are an example intangible economic goods.
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